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23 February 2017Americas

Life v Promega reaction: SCOTUS raises more questions

The US Supreme Court has “left more questions than it answered” in the Life Technologies v Promega ruling, which was handed down yesterday, according to lawyers.

The Supreme Court ruled that supplying a single component of a multi-component invention for manufacture abroad does not constitute patent infringement, giving a win to Life Technologies.

In the ruling, the Supreme Court reversed the earlier ruling of the US Court of Appeals for the Federal Circuit that said a single component was sufficient to be considered an infringement.

John Dragseth, principal of law firm Fish & Richardson, told LSIPR that the vast majority of patent cases involve either infringing acts inside the US or the importing of infringing articles into the US, adding that there are very few cases on exports.

“This decision is huge in the cases where it does apply because it could wipe all liability for sales outside the US, but export cases are not a significant percentage of the overall caseload in US courts,” said Dragseth.

According to Dragseth, the decision raises a couple of main issues that will have to be confronted in the future.

The main problem, he explained, is the understanding of what a component is when there is an assemblage of multiple things joined together into a single overall unit.

Dragseth added: “It likely depends on the context, which means we will never have a bright-line answer.”

Another issue which will need to be addressed is how one should determine whether the exported components are “substantial” when measured against the whole infringing product.

In the ruling, the Supreme Court said the phrase “substantial portion” has a quantitative, not qualitative, meaning.

Dragseth questioned the court’s definition in the ruling: “So do you just count up the number of exported components and divide it into the total number of components—and determine that there is infringement if the number is greater than, say, 50%, 75%, 90%, or 95%?

“Or can you—despite the court’s language—take into account the qualitative importance of the exported component to the overall product, as long as you also make sure there are at least two components?” he asked.

Ron Abramson, partner at Lewis Baach, agreed with Dragseth that the ruling raises questions.

“I’m not sure I buy the fine points of the court’s statutory construction reasoning, and I see many open questions raised by this decision.

“However, the big point here is that the Supreme Court has, quite properly in my view, cut off an argument that could have expanded US patent jurisdiction beyond reason by an exporter who did nothing more with respect to the US than supply a commodity component that is later used in making some further product abroad, where only the final product would have infringed had it been made in the US.”

John DiMatteo, partner at Holwell Shuster & Goldberg, said that besides the Federal Circuit instructing the district court to enter judgment for Life Technologies, the appeals court is also likely to re-evaluate how it interprets statutes.

He added: “I expect the Supreme Court will reverse the Federal Circuit a few more times this year on the basis of improper statutory interpretation.”

MaryAnne Armstrong, partner at Birch Stewart Kolasch & Birch, said the decision is very clear, but not very helpful.

"The court provided no guidance as to how to determine what would be 'substantial portion'. We know from the decision that the accused infringer must provide more than one component, but have gained no insight as to how many more than one.

"Are two components enough? Does the total number of components in system matter?" she asked.


More on this story

Americas
14 November 2017   The US Court of Appeals for the Federal Circuit has reversed its findings in Life Technologies v Promega, nine months after the US Supreme Court limited overseas patent infringement.

More on this story

Americas
14 November 2017   The US Court of Appeals for the Federal Circuit has reversed its findings in Life Technologies v Promega, nine months after the US Supreme Court limited overseas patent infringement.